As Momentum Picks Up Ethereum Burns $5 Billion Worth of ETH

In 2021, Ethereum enacted EIP-1559, and every day since then, ETH has been burnt. This improvement has pushed the network toward deflation, burning more than 30% of the money that would otherwise have gone into circulation. Only seven months after the update, the network has broken another record for the amount of ETH burned in terms of dollar value.

Over $5 billion in ETH has been lost.

The EIP-1559 became fully operational on August 5th. Given the ramifications of such an improvement on the network, this was met with a lot of excitement. Since then, it has burned ETH at a rapid rate, which intensified over the following few months as network traffic increased as the decentralized finance (DeFi) field grew in popularity. The fire swiftly topped $1 billion in burnt ETH, and seven months later, it has burned over $5 billion in ETH.

This is in light of the significant acceleration that has occurred in the previous six months. During this time, the rate at which ETH is burned has increased by 559 percent.The volume used is entirely due to fees since the network has witnessed increased usage in recent months. The burn is significant because it removes all of the burnt coins from circulation forever. This indicates that more than 1,950,00 ETH have been withdrawn from circulation since August 2021.

The network is burning around 80 ETH per hour at this expedited pace. This amounts to over $200K in ETH being burned per hour. In the seven months since the net decrease, the burn has increased by 67 percent.

At the time, Ethereum aimed to burn 2.6 million ETH in the first year of deployment, and at this pace, it seems that the network would reach this goal well before August 2022.

Ethereum Is Getting Closer to a Consensus Layer

The transition of Ethereum to the consensus layer (formerly known as ETH 2.0) is becoming closer by the day. The final integration is projected to occur in the middle of 2022, leaving just a few months till the anticipated launch date. This will take the network in a whole different direction, making it more efficient, scalable, and secure for all blockchain users.

Ethereum is still the second-largest cryptocurrency in terms of market capitalization. It’s now hovering around $2,500, which is an important support level for the cryptocurrency. At the time of writing, its market capitalization was $311 billion.